Long Island Educators and Public Employees
If your school or employer offers both a 403(b) and a 457(b), you can contribute to the 403(b), the 457(b), or both. When you use both, each has its own limit, so you can generally put up to the full limit in each. In 2026 you can defer $24,500 to a 403(b) and another $24,500 to a 457(b) before any catch-up, as long as both plans are open to you and your pay covers it.
The real differences show up in the catch-up rules and in what happens if you leave before 59½.
Catch-up contributions. Starting at age 50, a 403(b) and a governmental 457(b) both allow extra catch-up contributions. If you turn 60 to 63 this year, your plan may allow a higher amount. A 457(b) may also allow a special catch-up in the three years before your plan's normal retirement age, if you put in less than the maximum in earlier years. A 403(b) may allow an extra amount once you have 15 years of service with the same school or employer. Not every plan offers these options, and some can't be combined in the same year.
Leaving before 59½. Money in a governmental 457(b) generally isn't subject to the 10% early withdrawal penalty once you leave your job, at any age. The exception is money you rolled in from another type of plan or an IRA. Withdrawals from a 403(b) before 59½ usually carry that penalty, with some exceptions, such as separating from service in or after the year you turn 55. Pre-tax money from either plan is taxed as regular income when you take it out. It's a good idea to check with your tax preparer.
Many educators can contribute to both plans, or to either one, so these differences matter when deciding how to use them. The exact rules for your district are in your plan document, so that's the place to start. In a Complimentary 10-Minute 403(b) Checkup, I can walk you through what yours says.
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Each Plan Has Its Own Limit
You can contribute to the 403(b), the 457(b), or both. When you use both, each has its own limit, so money in one doesn't count against the other. Inside each plan, Traditional and Roth share that plan's one limit.
Leaving Before 59½ Works Differently
Taking taxable money out of a 403(b) early can come with a 10% extra tax. A governmental 457(b) generally doesn't add that extra tax once you separate from service, although income tax still applies to traditional balances.
Check What Your Plan Allows
Not every plan offers Roth contributions, loans, the 15-year catch-up or the 457(b) special catch-up. Your plan document lists which of these you can use.
How the Two Plans Compare in 2026
These lines describe a governmental 457(b), the kind school districts and public employers use. It's a good idea to confirm each line against your own plan before you raise a deduction.
Who it is for
403(b)
Public school employees, and employees of many nonprofits, hospitals, and churches, when that employer offers a 403(b).
457(b)
State and local government employees, including many school districts, when the employer offers a governmental 457(b). A tax-exempt 457(b) is a different plan, usually for a smaller group, and not every rule on this page applies to it.
2026 elective limit
403(b)
$24,500, or 100% of includible pay if that is less. It's separate from the 457(b) limit.
457(b)
$24,500, separate from the 403(b). Money you put into the 403(b) doesn't reduce it.
Age 50 to 59 or 64+
403(b)
Up to $8,000 more in the 403(b) if the plan allows it. That's $32,500 in the 403(b).
457(b)
You can also put the same $8,000 more in the 457(b), if it's a governmental 457(b) and the plan allows it. That's another $32,500 in the 457(b), on top of the 403(b).
Ages 60 to 63
403(b)
$11,250 instead of the $8,000 in the 403(b), if the plan allows it. That's $35,750 in the 403(b). The higher amount replaces the $8,000 rather than stacking on top of it.
457(b)
You can also use the same $11,250 in place of the $8,000 in a governmental 457(b), if the plan allows it. That's another $35,750 in the 457(b), on top of the 403(b).
Special catch-up
403(b)
With 15 years of service at the same eligible employer, such as one public school system, the 403(b) may allow up to $3,000 more this year. This catch-up is for the 403(b) only. The lifetime cap is $15,000. The amount is the lesser of $3,000, what is left of that $15,000, or $5,000 times your years of service there minus elective deferrals you already made to that employer's plan. It isn't automatic.
457(b)
In the three years before normal retirement age under that 457(b) plan, you may be able to defer up to $49,000, or the basic limit plus unused basic limit from earlier years, whichever is less. That date is the one in the 457(b) document. It isn't your pension retirement date unless the document says so. You generally can't use this and the 457(b) age-based catch-up in the same year. The 403(b) age catch-up can still apply that year.
Employer money
403(b)
An employer contribution usually doesn't use up the $24,500. Employee and employer dollars together are generally capped at $72,000 in 2026, or at your includible pay if that is lower.
457(b)
An employer contribution usually does count toward the 457(b)'s $24,500, because your money and the employer's money in the 457(b) share that plan's limit. Many public 457(b) plans are employee deferrals only.
Your pension
403(b)
What you pay into your pension doesn't use up the $24,500. The pension and the 403(b) are separate, and having a pension doesn't mean you can skip the 403(b) fee list.
457(b)
A pension contribution doesn't use up the 457(b) either. The 457(b) is extra savings beside the pension check, not a second pension.
Traditional or Roth
403(b)
Many plans offer both. Traditional and Roth in the same 403(b) share that plan's one limit. Traditional goes in pre-tax, and Roth goes in after-tax.
457(b)
A governmental 457(b) may offer Roth if the document allows it. A tax-exempt 457(b) generally doesn't. Traditional and Roth in the same 457(b) still share that plan's one limit.
Leaving before 59½
403(b)
A 10% extra tax can apply to many taxable withdrawals. Separation from service in or after the year you turn 55 can be an exception, if the money stays in the plan. Income tax still applies to traditional balances.
457(b)
After you separate from service, a governmental 457(b) generally doesn't add that 10% extra tax, at any age. Income tax still applies to traditional balances. Money that came in as a rollover from an IRA or another plan can still face the extra tax.
While you are still working
403(b)
Some plans allow a loan, a hardship withdrawal, or a withdrawal once you reach 59½ while you're still working. A hardship can include tuition or a home purchase if the document says so.
457(b)
Some governmental plans allow loans. A withdrawal while you are still working is usually an unforeseeable emergency, unless the document also allows one at 59½. Tuition and a home purchase often don't qualify.
Fees and choices
403(b)
Your employer has a list of approved companies you can open a 403(b) with. Some offer annuities and some offer mutual funds. Before you sign up, ask what you'd pay each year, including the fund expenses, any insurance charges on an annuity, any charge for moving your money out early, and any advisory fee.
457(b)
The 457(b) has its own list of investment options. It isn't always cheaper than a 403(b), so ask for the same list of fees before you put more of your paycheck into it.
Rollover
403(b)
A 403(b) can often be rolled over to an IRA or another workplace plan after you leave. A rollover isn't automatically the right move.
457(b)
A governmental 457(b) can also be rolled over. If you roll it into an IRA, you generally give up the no-extra-tax treatment on later withdrawals. It's worth learning whether a rollover fits before you move the money.
New York tax
403(b)
New York taxes 403(b) withdrawals differently from your state teachers' pension. Once you're 59½, New York may let you exclude up to $20,000 a year of certain pension and annuity income. Your tax preparer can tell you how this applies to you.
457(b)
Governmental 457(b) withdrawals aren't treated like your pension either. Some 457(b) payments may count toward the same $20,000 exclusion, but that doesn't mean the whole withdrawal is tax-free in New York.
Later required withdrawals
403(b)
Traditional balances generally require withdrawals later. If you were born 1951 through 1959, the age is 73. If you were born in 1960 or later, it's 75. If you're still working for the employer that sponsors the plan, you may be able to wait until you retire, if the plan allows it. Roth 403(b) balances generally don't require withdrawals during your lifetime.
457(b)
The same ages apply to traditional governmental 457(b) balances. You may also be able to wait while you still work for that employer, if the plan allows it. Roth amounts in the plan generally don't require withdrawals while you're alive.
Common Mix-Ups to Check First
Here are the most common mix-ups before someone changes how much they put in through payroll. The comparison above covers the rest.
Your Pension Isn't Your 403(b)
What you pay into your pension doesn't count against your $24,500, because the pension and the workplace account are separate.
The 15-Year Rule Isn't Automatic
Reaching year 15 doesn't raise your limit by itself. The 403(b) document has to allow it, and anything you've already used under that rule reduces what's left.
The 457(b) Catch-Up Uses Its Own Date
The special 457(b) catch-up is tied to normal retirement age in that plan. It isn't tied to your pension date unless the document says so.
Rolling Money Into an IRA Can Change the Taxation
After you leave your employer, you can usually take money out of a governmental 457(b) before age 59½ without the 10% early withdrawal tax. If you roll that money into an IRA, the IRA rules apply instead, so the 10% tax can apply to withdrawals before 59½.
You Can't Judge the Cost by the Plan Name
It helps to ask for the fee list on the vendor or menu you'd actually use, since a 457(b) isn't automatically the lower-cost account.
How Much You Can Set Aside in 2026
These are employee deferral amounts, and they're capped at your includible pay. Employer money on a 457(b) usually counts against the number, while employer money on a 403(b) usually doesn't.
Under 50
403(b) $24,500
457(b) $24,500
Both $49,000
Age 50 to 59 or 64+
This includes the $8,000 catch-up in each plan, if each plan allows it.
403(b) $32,500
457(b) $32,500
Both $65,000
Ages 60 to 63
The $11,250 replaces the $8,000 in each plan. It doesn't stack on top of it.
403(b) $35,750
457(b) $35,750
Both $71,500
For example, if you're under 50 and your employer offers both plans, you could put $24,500 in the 403(b) and $24,500 in the 457(b), for $49,000 in total, as long as your pay covers it. If your plan allows the 403(b) 15-year catch-up and you still have room under the $15,000 lifetime cap, you can add up to $3,000 on the 403(b) only. In a 457(b) special catch-up year, you can defer up to $49,000 to the 457(b) instead of the 457(b) age-based catch-up. The 403(b) age catch-up can still apply in that year.
If your FICA wages from that employer were over $150,000 in 2025, a 2026 catch-up generally has to be Roth. If the plan has no Roth option, it's a good idea to ask payroll whether the catch-up is available to you.
Figures follow the IRS cost-of-living adjustments for 2026. You can read the IRS pages on 403(b) contribution limits, 457(b) contribution limits and the IRS 2026 limits announcement
If You Can Only Fund One Plan
If you have a match, it usually makes sense to start there, since otherwise you're passing up that employer money. If neither plan matches and you might leave before 59½, the 457(b) is usually the more flexible account because of the withdrawal rule above, and you can put the rest in the 403(b).
This is a general starting point, not a recommendation for your situation. Your pension, your spouse's retirement plan or plans to buy a home could change what makes sense for you.
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Choosing Traditional or Roth
Traditional
Traditional money goes in before tax, which lowers your taxable income this year. Withdrawals in retirement are taxed as ordinary income.
Roth
Roth money goes in after tax, and qualified withdrawals, including earnings, can be tax-free. Your plan has to offer Roth, and you need to meet the qualified rules.
Either way, it's a choice about when you pay tax. Using both Traditional and Roth doesn't double your room under the limit.
How These Plans Fit With Your Pension
Most public school teachers on Long Island have a pension through the state teachers' pension system. The 403(b) and the 457(b) are savings accounts in addition to that check, not a replacement for it.
You open these accounts through your employer, using the approved vendor list, and many Long Island districts use an outside administrator for that list. State employees often have a statewide 457(b), and a school district or town may offer its own, but those aren't automatically the same plan.
Meet in Hauppauge or by video through Atlas VirtualWealth.
What to Expect When You Book
1. It Takes About 10 Minutes
You pick a time that works for you, and you meet with Christopher by video.
2. A Look at Your Plan
The conversation covers your fees, who your plan provider is, and whether you're using one plan or both. If you'd like more than the checkup, an Atlas VirtualWealth session is a personal virtual planning conversation.
3. You Leave With Questions for Payroll
You'll leave with a short list of questions for payroll. No money is moved on that call.
Related Pages
Open the Educator Benefits Checklist
This walks through the 403(b), the 457(b), the pension, and the insurance that's already in your paycheck.
Open 403(b) at a Glance
It's the short version of the 403(b), covering limits, fees, and what to ask before you sign a vendor form.
Learn How 457(b) Plans Work
This is the companion page for the governmental 457(b) many Long Island districts offer beside the 403(b).
Learn How to Open Both Plans
How payroll, the vendor list, and Traditional or Roth actually get set up.
Learn Pension Options
This covers the pension payment choices Long Island teachers have alongside these accounts.
Learn About Fees
What a planning fee covers, and what it does not, before you book anything longer than the checkup.
Frequently Asked Questions
Can you put money in both a 403(b) and a 457(b) in the same year?
If your employer offers both, yes. You can contribute to the 403(b), the 457(b), or both. When you use both, each has its own limit, so you can generally put the full amount in each. In 2026 that's $24,500 in the 403(b) and $24,500 in the 457(b), before any catch-up. Your pay still has to cover it.
Does a 457(b) share a limit with a 403(b)?
No. A governmental 457(b) has its own deferral limit, and your 403(b) money doesn't count against it. If your employer offers both, you can generally put up to the full limit in each.
What happens if you leave before age 59½?
On a 403(b), a 10% extra tax can apply to many taxable withdrawals before 59½. Separation from service in or after the year you turn 55 can be an exception, if the money stays in that plan.
On a governmental 457(b), that 10% extra tax generally doesn't apply after you separate from service, at any age. Ordinary income tax still applies to traditional balances. If you roll the money into an IRA, that treatment can change.
Can you use every catch-up in the same year?
On a 403(b), the 15-year service catch-up and the age-based catch-up can both apply if the plan allows them. Amounts above the regular limit count toward the 15-year catch-up first.
On a 457(b), you generally can't use the special three-year catch-up and the 457(b) age-based catch-up in the same year. Your 403(b) age-based catch-up can still apply that year.
Do you get two limits if you use both Traditional and Roth?
No. Traditional and Roth in the same plan share that plan's one limit. Traditional dollars go in before tax, and withdrawals are taxed as ordinary income. Roth dollars go in after tax, and qualified withdrawals, including earnings, can be tax-free. The plan has to offer Roth.
How do you open a 403(b) or a 457(b)?
You open them through your employer, using the approved vendor list, and payroll sends the money. A district plan isn't an IRA you open on your own.
Is the checkup a sales pitch?
No. The complimentary 10-minute 403(b) checkup is a short review of fees, choices, and the next questions for payroll. If you'd like a longer planning conversation, that's a personal Atlas VirtualWealth session.
How do these plans fit with a pension?
Most public school teachers on Long Island have a state teachers' pension. The 403(b) and the 457(b) are extra savings beside that check, not a replacement. Your pension contribution doesn't use up either elective limit.
Is a 457(b) always cheaper than a 403(b)?
No. The cost depends on the choice in front of you. It's worth reading the expense ratio, any mortality and expense charge, any surrender period, and any advisory fee on the approved list, because the plan type doesn't set the price.
Does New York tax a withdrawal the same way as a pension?
Not always. New York handles your state teachers' pension separately from a 403(b) or a governmental 457(b). Once you're 59½, New York may let you exclude up to $20,000 a year of certain pension and annuity income. Your tax preparer can tell you how this applies to you.
Book Your Complimentary Checkup
Christopher spends 10 minutes with you by video on the 403(b), the 457(b), or both. If you'd like more time, you can set up a personal Atlas VirtualWealth session.
Book Complimentary 10-Minute Checkup Book a Complimentary Atlas VirtualWealth Session Call (631) 389-2358No obligation.
Atlas Benefits Advisor
Christopher J. Vargas, LUTCF®
President & Chief Benefits Strategist
410 Motor Parkway, 2nd Floor, Hauppauge, NY 11788
cvargas@atlasbenefitsadvisor.com
Monday to Friday, 9:00 a.m. to 5:00 p.m. Saturday by appointment only.
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